30 May

RICS: Mortgage availability issues affecting housing market

RICS: Mortgage availability issues affecting housing market

The current difficulties in the mortgage market, with providers tightening their lending criteria and raising rates, are "stretching accessibility" and could reduce transaction levels significantly this year, the Royal Institution of Chartered Surveyors (RICS) has warned.

Following Nationwide's latest house price data, which recorded a 2.5 per cent fall in average house prices for May, the body suggested that sellers are choosing to cut prices as buyers are unable to secure finance.

It predicted that "the market will only stabilise once transaction volumes recover".

In order to help the mortgage market on the road to better health, RICS has called on the government and the Bank of England to continue to implement further measures such as its special liquidity scheme, "before the drop in transactions and prices begins to really hurt the economy".

House prices were 4.4 per cent lower year-on-year this month, according to Nationwide's index, but five per cent higher than they were two years ago at £173,583.

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